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Britain to chop severance pay for laid-off workers

Published:Wednesday | July 7, 2010 | 12:00 AM

The British government, which is poised to lay off hundreds of thousands of employees, announced Tuesday that it will slash its payoffs to long-serving civil servants who lose their jobs.

Francis Maude, the minister in charge of the Cabinet Office, said the government will legislate to cap compensation at 12 months' salary for civil servants who are laid off, or 15 months for those who give up their jobs voluntarily.

The Public and Commercial Services Union said it would oppose the changes.

Currently, some long-serving employees can claim more than six years' salary in compensation if they are laid off, Maude said.

"What is on offer now is simply untenable and completely out of kilter with what is on offer in the wider public sector and the private sector," Maude said.

"Our ambition now is that a negotiated, sustainable and practical long-term successor to the existing scheme can be agreed, one that is flexible and appropriate for current economic climate and also fair for lower paid workers."

600,000 jobs to be cut

Prime Minister David Cameron's coalition government is planning to slash departmental budgets by an average of 25 per cent, and official projections from the new Office for Budget Responsibility suggest that 600,000 civil servants will lose their jobs over the next five years.

Attempts by the previous government to limit layoff pay were blocked by courts.

"It would be absolutely outrageous if the government were to seek to change the law to get around the clear decision of the High Court, which has ruled twice in our favour," said Mark Serwotka, general secretary of the Public and Commercial Services Union.

"The court has ruled that detrimental changes to our members' terms and conditions cannot be made without their agreement. This is clearly an attempt to make massive job cuts, which makes no economic sense at a time of recession," Serwotka said.

- AP